IPhone changes dynamics of game software industry
After years of building large, graphics-intensive blockbusters, developers are starting to make shorter, less expensive games for the iPhone and its phone-less sibling, the iPod Touch. — Reporting from San Francisco — Only a few years ago …
Context & Ripple Effects
The iPhone's arrival as a games machine was slow out of the gate: GigaOM asked in July 2007 where the iPhone games actually were, and that same summer the New York Times was still probing whether Hollywood could squeeze its content onto the device at all (Hollywood and the iPhone). The question flipped by late 2008, when Business Week flagged Apple as a soon-to-be mobile gaming force and Infinite Loop reported major titles mature enough to join the fray.
What changed with this Los Angeles Times piece is the supply side of that story: developers who spent years building large, graphics-intensive blockbusters are now deliberately making shorter, cheaper games for the iPhone and the phone-less iPod Touch. That is a production-model pivot, not just a new storefront — and it matters because it signals where studio labor and budgets are heading.
First-order effects
- Studios reallocating teams to iPhone and iPod Touch projects face a different economics: smaller scopes and lower price points per title replace the blockbuster budget cycle.
- Apple's handheld platform gains a growing catalog of low-cost games, deepening the App Store's pull on both developers and players.
Second-order effects
- Publishers still committed to expensive, graphics-intensive titles must justify their price premium against a flood of inexpensive alternatives on the same pocket-sized screen consumers already carry.
- Talent and development resources migrate toward short-cycle mobile production, pressuring staffing and portfolio decisions at studios built around long blockbuster timelines.
Third-order effects
- If the pattern holds, the game software industry splits into two structures — big-budget packaged goods and rapid-turnaround mobile titles — with distribution shifting decisively toward direct downloads rather than retail shelves.
- A generation of gamers introduced to gaming through cheap phone titles expands the buyer base beyond traditional consoles, changing what 'the audience' means for publishers.
The trend: Game development is bifurcating between blockbuster console production and a fast, cheap, download-delivered mobile market anchored by Apple's devices.